In late 2014, Samsung Electronics, the smartphone maker, announced that it would be buying back $2 billion of its own shares. Specifically, it expects to buy back 1.65 million common shares and 250,000 preferred shares. Samsung is also expected to increase its dividend in 2015. Questions What is the impact on Samsung’s balance sheet (assets, […]
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How does a convertible bond issued by Fiat Chrysler Automobile affect the company’s balance sheet?
January 23, 2015 
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Fiat Chrysler Automobiles (FCA) launched a $2.5 billion convertible bond issue in December 2014. FCA will be using the funds generated from the bond issue to help to turn its Jeep, Maserati, and Alfa Romeo brands into global brands, competing directly against Volkswagen and BMW in the premium car market. The bond issue will mature […]
Continue readingWhat impact do lower fuel costs and other changes have on an airline’s net income?
January 16, 2015 0 Comments
American Airlines Group (AAL), the world’s biggest airline, has been reporting record profits in recent quarters. United Continental Holdings and Southwest Airlines also reported record profits. Part of what has contributed to the record profits has been the decline in the cost of oil. The price of oil has fallen during 2014; we are spending […]
Continue readingWhich costs will be capitalized by United related to its 23,000 iPhone 6 Plus handsets for flight attendants?
January 9, 2015 0 Comments
In 2015, United Continental Holdings, Inc., (UAL), will be purchasing 23,000 iPhone 6 Plus handsets for its flight attendants to use in-flight for retail transactions. The phones will also be used for email, United’s internal network, and various policies and procedures manuals. Beyond the cost of the iPhone 6 Plus handsets, United will have to […]
Continue readingWhat happens to the balance sheet of Trump Taj Mahal if billionaire investor exchanges debt for equity?
December 22, 2014 0 Comments
An Atlantic City casino, the Trump Taj Mahal, has been struggling financially in recent years like many other casinos in the city. In 2014, four of Atlantic City’s casinos closed their doors, including the Revel, Showboat, Trump Plaza, and the Atlantic Club. Billionaire investor Carl Icahn holds $286 million of the Trump Taj Mahal’s debt. […]
Continue readingHow did Apple’s 7-for-1 stock split affect its total stockholders’ equity?
November 20, 2014 0 Comments
In June 2014, Apple, Inc. (AAPL) did a 7-for-1 stock split, meaning that an investor who previously held one share of Apple stock would have seven shares on the date of the split. Before the split, Apple had 861 million shares of stock valued at roughly $650 each. After the split, Apple had approximately 6 […]
Continue readingWhat internal controls might have prevented a former Smucker employee from stealing $4.1 million over 16 years?
November 4, 2014 2 Comments
In October 2014, a former Smucker employee, Mark Kershey, was charged with defrauding the J.M. Smucker Company of more than $4.1 million over a 16 year period. Kershey was the chief airplane mechanic at the company’s hangar at the Akron-Canton Airport in Ohio from 1990 until he was discharged by Smucker in 2013. From 1997 […]
Continue readingHow does Nike recognize the costs of suing 31 companies over Chuck Taylor trademark infringement?
October 29, 2014 0 Comments
In October 2014, Nike filed suit against 31 companies, claiming these companies have infringed on Nike’s Converse Chuck Taylor All Star sneakers trademark. Chuck Taylor All-Star sneakers have been made since 1917 when Converse first produced them (Nike purchased Converse in 2003). It is an iconic shoe, with black stripes and a rubber toe topper. […]
Continue readingWhat is the accounting impact of the issuance of Solar Bonds by SolarCity?
October 17, 2014 0 Comments
SolarCity is a U.S. company that designs, finances, and installs solar energy systems. These solar energy systems are installed at businesses, homes, non-profits, and other organizations. On October 15, 2014, SolarCity launched its first public offering of Solar Bonds. This public offering allows individuals to invest in SolarCity by purchasing bonds from SolarCity’s website. There […]
Continue readingHow will Slappey Communications’ investment in PP&E affect its financial statements?
September 30, 2014 0 Comments
Slappey Communications is a technology firm in Birmingham, Alabama, specializing in telecommunications, computer, and network security. Its owner, Bill Slappey, invested nearly $770,000 in property, plant, and equipment for the business in 2014 (See “Small Firms Poised to Spend More on Plants, Equipment,” A. Loten and V. Monga, Wall Street Journal, September 3, 2014.) Slappey […]
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